Britain outraged over demand by EU to hike its budget by 5%

The British government has rejected a proposed increase in the European Union (EU) Commission’s annual budget as “totally unacceptable” in the current climate of austerity cuts across Europe.

The EU has demanded a 4.9 percent increase ( a figure that would push the budget for 2012 to about 132.7-billion euros or £117-billion) in order to fund existing spending commitments.

EU Budget Commissioner Janusz Lewandowski said the request for a budget hike represented a delicate balancing act combining austerity and growth-boosting measures for 500 million Europeans.

However, he added that he expected tough negotiations over the size of the budget.

According to reports, it is estimated that British taxpayers paid a total of £5.3billion to the EU in 2009 and £9.2billion in 2010. The newly proposed increase for 2012 would mean that British taxpayers will pay more than £10 billion to the EU.

A spokesman for Westminster said a 4.9 percent increase would not be acceptable to us. We will work very closely with other EU governments to drive the hardest possible bargain.

A UK official also noted that last year when the EU sought a 6 percent budget hike, Britain and other European partners were able to reduce that figure to about 2.9 percent after much wrangling.

This year we would expect the European Commission to adjust to the mood of austerity that is sweeping the rest of Europe. Every other public sector organization is cutting back and the EU should do the same, said British Conservative MEP Martin Callanan.

The European segment of Britain's Labour Party also opposes the budget increase.

MEP Derek Vaughan of Labour said: We believe that savings can be found to avoid this increase and still put money into areas that are in vital need of EU support.

In addition, last year Britain, France and Germany proposed that the EU budget be frozen until 2020, with any boosts linked to inflation. (The current 4.9 percent hike request is far above the EU inflation rate of 3.0 percent).

Along with British Prime Minister David Cameron, his counterparts in France (Nicholas Sarkozy) and Germany (Angela Merkel) will likely fight the EU budget increase demand.

Reuters reported that the largest increases in the newly proposed budget are designed for regional development, research, and measures to encourage economic growth. However, since the poorer members of the bloc tend to receive the bulk of development spending, it rankles the wealthier member nations.